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Augustus and Currency

The monetary history of the Roman Empire was transformed, as was so much else, by Augustus. Augustus came to power after the end of a chaotic period of civil war during the rule of the various triumvirates. This was a chaotic period from the monetary point of view, with each of the triumvirs were issuing their own money. Mark Antony in particular was very naughty, issuing large amounts of highly debased coins which remain in circulation for several centuries afterwards on the principle of Gresham’s Law, that bad money drives out good: people hoard good money but pass on bad money as rapidly as possible.

Augustus transformed the monetary situation by issuing a new set of money, both a gold and silver denarius of remarkable purity and also a range of bronze coins for small change. Quite how he managed to produce so much money of such high purity, remains a mystery: not only did he have his own soldiers to pay off, but also the soldiers of his opponent Mark Antony; indeed it was his generosity to his opponents that was part of his overall achievement. No doubt he was helped by the huge amount of money he received as tribute from his overseas conquests, but it must also attest to very considerable skills as a bookkeeper.

The Augustan monetary reform lasted for two centuries. True there was some debasement of the coinage beginning with Nero (AD 54 – 65). In the Roman world, the emperors had two main means of manipulating the currency and thereby unwittingly causing inflation. Firstly they could debase the coinage. It is fairly easy to mix a certain amount of (cheap) copper into the (expensive) silver and thereby have enough metal to produce more coins. This sooner or later results in inflation – but it also provides a splendid means for the modern numismatist to track the Emperor’s cheating.

The second source of inflation is by changing the values of the coins, or by increasing the pay of the soldiers, for in the Roman world, the pay of the soldiers was the money supply, and if the pay of the soldiers was doubled, then twice as much money as before was put into circulation. Thus in tracking the monetary history of the Roman world, we need to track these two elements.

Following the debasement instituted by Nero, there were further minor debasements in the following 150 years, but down to around AD 200, the system introduced by Augustus remained intact, though the purity had declined possibly by as much as 50% due to successive minor debasements. The real change came with Septimius Severus.